Texas Will Register MCA Providers Starting September 1: What Chapter 398 Means for Your Business

Starting September 1, 2026, companies that provide or broker merchant cash advances in Texas must register with the state's Office of Consumer Credit Commissioner (OCCC) through the NMLS system. The requirement comes from Chapter 398 of the Texas Finance Code, the commercial sales-based financing law created by House Bill 700. For business owners, the change does not rewrite existing MCA contracts, but it does make funders easier to identify, verify, and hold to a public standard.

Here is what the new registration regime covers, the dates that matter, and what it realistically means if you currently have an advance or are considering one.

What counts as commercial sales-based financing in Texas?

Chapter 398 covers financing that is repaid either as a percentage of a business's sales or revenue, or through payments that are periodically adjusted based on sales or revenue. That is the defining structure of a merchant cash advance: payments rise and fall with your receipts rather than following a fixed loan schedule. The law applies to commercial-purpose transactions, not consumer credit, and it reaches both the companies providing the financing and the brokers arranging it.

The dates business owners should know

According to the OCCC's Commercial Sales Based Finance page, the registration system works like this:

September 1, 2026: providers and brokers can begin submitting registration applications through NMLS, the same national licensing system used for mortgage companies. A registration becomes active once the OCCC receives the initial fee.

November 1 to December 31: the annual renewal window. Registrations not renewed by December 31 expire.

January 1 to February 28: a reinstatement window for registrations that missed renewal. After that, a lapsed registration is designated terminated.

Registrations are not transferable. If a funder is acquired or reorganizes under a new entity, the new entity needs its own registration.

What registration changes for merchants

The practical benefit is visibility. Once registration is underway, you will be able to check whether a funder or broker operating in Texas is registered with the OCCC, the same way you can look up a mortgage company today. A provider that continues soliciting Texas businesses without registering after the requirement takes hold is waving a red flag, and that is information worth having before you sign anything, and worth mentioning to your attorney if a dispute arises later.

It is equally important to be clear about what the law does not do. Registration does not cap the cost of an advance, reduce an existing balance, or pause collections. If your payments are already straining cash flow, the new rules are not a rescue mechanism. The options that exist for that situation are the same ones we cover in our guides to stopping daily MCA payments and what happens after an MCA default.

Part of a bigger shift in how states treat MCAs

Texas joins a growing list of states pulling sales-based financing under formal oversight, and courts have been moving in parallel: a New York court recently reclassified a portfolio of MCAs as loans, a decision with real consequences for how those contracts are enforced. The direction of travel is more scrutiny of funders, more disclosure, and more places where a merchant can check who they are dealing with.

If you are a Texas business owner juggling one or more advances and want to understand where you stand before the new rules take effect, a free consultation can map your balances, your contract terms, and the routes that may apply to your situation.

Does Chapter 398 apply to my existing MCA contract?

The registration requirement applies to providers and brokers doing business in Texas going forward. It does not rewrite or cancel agreements you have already signed. Your current contract's terms still control, so review them with a licensed attorney if you have questions about your obligations.

Will the new Texas rules lower what I owe on my advance?

No. Registration does not reduce balances, cap payments, or erase fees. Any change to what you owe depends on your contract and on negotiation with your funder, and no negotiated outcome can be guaranteed.

How can I check whether a funder is registered?

Applications open through NMLS on September 1, 2026, and the OCCC maintains a public licensee search. Once registrations are being issued, searching the provider's legal entity name will show whether it holds a Texas CSBF registration. If a provider soliciting your business is not registered after the requirement takes effect, raise it with an attorney.

This article is general information, not legal or financial advice. Regulatory requirements change and every contract is different. Confirm current requirements with the OCCC or a licensed Texas attorney before acting on anything here.